Assignment: Commission Accreditation Visit
Slowing the growth of Medicare spending is particularly important in relation to the “graying of America”—the increasing proportion of the population that is aged 65 years or older. This demographic phenomenon is caused by the baby boom population (those born between 1946 and 1964) that makes up approximately 26 percent of the existing US popu- lation. In 2011 this age segment began turning 65 and began drawing Medicare benefits.
The healthcare reform laws of 2010 have substantially improved the financial outlook for Medicare; it is now projected to remain solvent through 2028. The improvement in future Medicare financing is based on increased tax contributions by the wealthy as well as reduced payment updates for most Medicare goods and services. To accommodate the reduced payment updates, the federal government is assuming that productivity growth in healthcare can match the productivity growth in the overall economy. To facilitate this growth in productivity, the healthcare reform laws provide for demonstration projects in delivery and payment systems to improve efficiency (Social Security and Medicare Trustees 2016).
reImbursement to ProvIders Funded by the federal government, Medicare Part A reimbursed hospital services based on retroactive, reasonable cost—that is, cost-based reimbursement—from 1966 until 1983. Recognizing that hospitals charged more than cost, Medicare reimbursed hospitals a percentage of the charge at the time of service and then made adjustments based on cost reports that it required hospitals to file. To ensure quality, Medicare required hospitals to either pass a Joint Commission accreditation visit, called deemed status, or undergo a Medi- care certification visit. This certification visit was thought by most observers to be more difficult by design; Medicare did not want to be in the inspection business and preferred that hospitals seek deemed status provided by The Joint Commission. Medicare Part B reimbursed physician and outpatient services based on “reasonable and customary charges,” which allowed physicians to realize a profit by providing services to Medicare patients since the charge for a service is always more than its cost.
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